Around 700,000 people are using a debt management plans as way to reduce debt by making affordable payments.

Three quarters of a million people have benefited from a debt management plan since the economy went into a tailspin – and the numbers are set to increase.

A debt management plan has given the struggling consumer relief from financial stress, enabling them to repay creditors lower and more affordable amounts. Debts.org is at the front line in debt management and have witnessed first hand the increasing popularity of debt management plans over recent months. Why are they so popular? A debt management plan is less serious than an Individual Voluntary Arrangement (IVA), therefore it doesn’t adversely affect the consumer’s credit report.

Furthermore, we deal with all negotiations and handle all correspondence, giving the debtor a chance to relax knowing their debts are in hand.

Debt Management – a popular solution The Times this week picked up on debt management plans soaring popularity. The newspaper correctly pointed out that it is the creditors discretion as to whether they accept a negotiated repayment plan. However, as a leading debt specialist, Debts.org has a much better chance of securing lower payments for the consumer if they go through us rather than go it alone.Creditors, such as banks and credit card companies look more favourably on negotiations conducted by a professional company, as it reassures them that the plan will be correctly implemented and adhered to. While most banks and credit card companies, even including Barclaycard who have something of a hardnosed reputation, have been sympathetic to the customer’s predicament. Not all institutions have proven to be as understanding, Northern Rock and Halifax being a case in point. Both lenders have been criticised by debt charities for failing to take into consideration individual circumstances. The Banking Code obligates lenders into co-operating with debt charities. Section 14 states: “We will be sympathetic and positive when we consider any financial difficulties that you may have. If you ask us to, we will work with debt-counselling organisations, such as Citizens Advice or the Consumer Credit Counselling Service.”

Debt Companies

 

As the recession has worsened and debt charities are swamped with customer concerns and complaints, reputable debt specialists such as Debts.org have come to the fore. As a result, consumers are able to join debt relief programmes such as a debt management plan or IVA without delay, saving money in the process. While the Banking Code is in theory an important piece of legislation, its broad nature can favour banks over consumers. For instance many creditors respond differently to debt management proposals, some with minimum payment caps and other with percentage levels. When in fact, it would benefit all if lenders accepted an offer that was deemed fair in light of affordability. The Government and the Credit Service Association ruled last year that debt-collection agencies must postpone debt collection by 30 days from the time they have been contacted by a debt adviser. After that 30-day period, however, the lender is permitted to decide whether it accepts the debt adviser’s proposals. Lenders who have rejected repayment proposals have threatened consumers with a County Court Judgement (CCJ) for the unpaid debt. However, if the consumer is genuinely unable to pay, a court can rule in their favour. If you would like to get out of debt by lowering monthly loan repayments, find out how a debt management plan can help you. Alternatively you can call our approved advisers free advice line on 0800 014 7863